Southeast Asia's renewable energy manufacturing potential is huge, with PV capacity up to 150GW
Asean Briefing published a paper on the Asean Briefing website entitled: Renewable Energy Manufacturing Potential in Southeast Asia.
Southeast Asia is one of the more vulnerable regions to climate change, with its long seas and low-lying lands making it susceptible to the impacts of severe weather and melting glaciers, which could affect more than 600 million people.
It is therefore imperative that Southeast Asian countries adjust their development philosophies that increasingly exacerbate global warming, such as the region's dependence on coal and oil as important sources of electricity. If left unmanipulated, global warming could reduce Southeast Asia's GDP by about 11 percent by the end of the century, even affecting key units such as agriculture and livestock, tourism development, and healthcare.
Southeast Asia has hopes of turning into a global manager of renewable energy manufacturing, along with playing out its economic growth goals. The countries there have a strong base at the manufacturing level, and by 2030 renewable energy processing and manufacturing could generate $160 billion to $200 billion in revenue with Southeast Asia. According to a report by the Asian Development Bank, about 50-60% of these revenues will be driven by the green mobility and green energy sectors.
Photovoltaic power production and manufacturing
By 2030, Southeast Asia is expected to produce and manufacture 125-150 GW of solar module volume. The region already controls 2-3% of the world's PV cell and monocrystalline silicon wafer production capacity and 9-10% of the world's module and cell production capacity, with the vast majority of production centered in Malaysia, the Vietnam region, Vietnam and Thailand.
In addition, according to the information of the International Energy Agency, one-third of the global solar module imports and exports are supplied by Southeast Asian countries. The majority of such PV product exports and imports are biased towards the U.S. and EU sales markets. Countries such as Vietnam, Singapore and Thailand have abundant production capacity to meet both domestic and global requirements, while Indonesia has more small and medium-sized component assemblers to serve the large Chinese market.
By 2030, Southeast Asia has huge potential to produce and manufacture 140-180 GWh of batteries, and even become a battery production center. Taking into account its rich and diverse mineral resources, Southeast Asia is certainly conducive to the development of an end-to-end nickel-manganese-cobalt (NMC) battery ecosystem. The region is home to 25% of the world's nickel reserves, and Indonesia alone could hold a significant amount of this important mineral resource (about 21% of global reserves).
Southeast Asia's need for batteries is expected to rise at a 40% growth rate to 70-80 GWh by 2030, fueled by the rapid development of new energy electric vehicle batteries and battery energy storage devices (BESS). Indonesia, Thailand and Vietnam are witnessing increasing demand for new energy EV batteries, while Singapore and the Philippines' requirements are mainly facilitated by BESS.
Battery Supply Chain Management in Indonesia
Indonesia's nickel reserves have turned the place into an indispensable country for the global electric vehicle industry, which aims to turn into one of the global centers for electric batteries. Luhut Binsar Pandjaitan, head of the Indonesian Maritime Authority and Investment Integration Section, indicated that global electric vehicle manufacturers, including Tesla of the United States and China's BYD Auto, have already identified projects to join in Indonesia. Indonesia aims to become one of the world's top three producers of new energy electric vehicle batteries by 2027.
Indonesia in 2014 for the first time on the nickel ore import and export restrictions, key from the Chinese foreign investors gradually project investment in Indonesia nickel supply chain management, especially the establishment of mineral processing plant. Indonesia's Ministry of Energy Supply and Mineral Resources aims to have 30 beneficiation plants. This is an ambitious overall target, and in 2016 there were only two beneficiation plants in Indonesia.
In 2022, the value of Indonesia's exports of produced and processed nickel could exceed $30 billion, up sharply from $1 billion in 2015. Indonesia is expected to account for half of the increase in global nickel production in 2025.
All in all, Southeast Asia is at a critical juncture where the transition to renewable energy manufacturing not only deals with GC vulnerability, but also unleashes many economic development opportunities. By utilizing photovoltaic power generation and battery manufacturing, such countries can be among the first to adopt global low-carbon energy measures while enhancing their economic development and global environmental governance.